Announcement of World Bank Sets New Record in Lending to Colombia on June 29, 1978

' I . 'FOR IMMEDIATE.RELEASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (2Q2j .J93-6360 BANK NEWS RELEASE JUNE 29, 1978 WORLD BANK. SETS NEW RECORD IN LENDING TO COLOMBIA The World Bank's Joan commitments to Colombia have achieved a record level in fiscal year 1978, ending June 30 this year. The Bank has approved seven long-~erm Joans totalling $354.6 million for development projects in that co~ntry, an increase of more than 25% over the previous year. The World Bank lending supported a wide range of development programs by Colombia. The Bank's 1978 lending included the first loans for nutrition improvement and for urban development in Colombia. Other loans were for water supply and sewerage, power generation and transmission, and industrial develop- ment. The seven development projects assisted by the Bank will receive • total in'vestments by the Colombian government of about $900 mi 11 ion • With this year's commitments, the Bank has approved a total of 74 loans for Colombia, since it began operations in the country in 1949, amounting to $1.95 billion (including $19.5 million from the International Development Association). This figure includes 20 loans for power ($526.2 million), 13 for transport ($325.7 million), 12 for agriculture ($240.6 million), 11 for indus- try ($4'08 mi 11 ion), seven for water supply ($172.4 mi 11 ion), four for telecommu- nications ($106 million) ,three for education ($35.3 million), two for general development and pre-investment studies ($68 million), one for nutrition ($25 million), and one for urban development ($24.8 million). Since 1968, Bank len9ing in Colombia has become more diversified and has been concentrated on productive activities·with social as well as economic benefits. The projects for nutrition improvement, urban dev~lopment, and.water supply supported this year are principally designed .to improve the standard of· living of the poorest people. The objectives of this year's Bank-assisted projects are summarized as fo 11 ows: Nutrition Improvement The $25 mlllion loan will assist Colombia in cqmbating widespread malnutrition among the poorest 30 percent of the population. The project will be implemented in seven of the country's 22 departments and in the district of •• Bogota, which represent two major heavily populated regions with a high cdn- centration of Colombia's poorest. • •• ! NOtE: Money figures are e~pressed in U.S. dqllar ~quivalents.  - 2 - The project's total cost will be $68.9 million. The project includes construction or reconstruction of 281 health posts, provision of potable water for about 372 rural communities, installation of 112,000 household latrines, • promotion of about 20,000 family gardens and 100 school demonstration gardens, and studies related to the manufacturing, processing, storage and marketing of nutritious foods. About 1.8 million people, 70% of them in rural areas, are expected to benefit from the project. It ii anticipated that the project will reduce by 20% the absenteeism from work caused by sickness and reduce the infant mortality rate by 25% in these areas. The project, apart from improving nutrition, is expected also to raise living standards and productive capacity. Water Supply and Sewerage The World Bank is helping finance the Second Cali Water Supply and Sewerage Project with a loan of $1J.8 million. The project, with an estimated total cost of $42.9 million, aims at improving the living conditions in Cali, the third largest city of Colombia. The project is expected to benefit direct.ly about 250,000 people, most of them earning less than $150 per capita per year. In addition, about 160,000 people will benefit through house connections. The project includes the reduc- tion of contamination levels of the Cauca River, at present about 500 times • higher than acceptable standards. Urban Development The first urban development project supported by the World Bank in Colombia is expected to benefit abqut 550,000 people, most of them poor, in 23 cities throughout the country~ A $24.8 million loan was approved for the project, which has an estimated total cost of $62 million. The project includes construction of 27 community developm~nt centers, extension of primary education to about 95% of the eligibJe popu1ation, prov1s1on of health and nutrition services, and promotion of community enterprises and credit. Some 26,000 people will benefit from vocational training and promotion· of cooperatives, and about 3,800 new jobs will be created. Power Generation A $126 million World Bank loan supports the San Carlos I Hydro Power Project, aimed at pro~iding about 15% of the additional capacity required by the country in the early 1980s. The project will comprise the first stage of the San Carlos hydroelectric complex, with an installed capacity of 620 megawatts. The project forms part of the lnterconexion Electrica S.A. (ISA) 1 s expansion program for 1978-1982, that will require a total investment of $421.3 million. The project includes the construction of a 70-meter high earth dam on • the Guatape River, inlet and discharge tunnels, and an underground power station • ••• ! • Power Interconnection - 3 - The World Bank is also helping finance an Interconnection Project that will link the hydro-based Centrai System with the thermql-based Atlantic Coast System. The project includes the construction of a single circuit, 523-kilometer long, 500 kilovolt transmission line between the San Carlos substation and Sabanalarga, near the Atlantic coast. The project will link the country's major power systems~ It.will result in more economical development and operation of the. national power system. It will also contribute to fuel savings of about $1.3 billion (at 1976 prices) over the life of the project. Export Processing Zone An industrial export processing zone will be established in Cartagena, on the Colombian Atlantic coast, with the World Bank's assistance. The Bank approved a $15 million loan to help finance the project, the first of this type in Latin America. The project, with estimated total cost of $31.3 million, aims at in- creasing and diversifying Colombian exports. About 38 hectares of swamps will be • transformed to establish an estimated 30 export-oriented industries. The project will comprise the first five-year stage of a 92-hectare export processing zone to be built in 12 years. Industrial Development Industrial development in Colombia will be supported by a $100 million World Bank loan to Banco de la Republica, Colombia's Central Bank, which will re lend to private development finance companies to· assist some 200 industrial projects. This will be the seventh. loan for industrial development in Colombia. The loan will help promote exports and regional decentralization, and will help finance medium- and small- size enterprises. The projects are expected to help create about 13,000 additional jobs and to generate exports valued at about $150 mi 11 ion an n ua 11 y. - 0 - •